tv The Profit CNBC November 5, 2019 12:00am-1:00am EST
ll. she probably just... ah, don't take it personal. ...didn't realize it. she probably just liked the deal. on "the profit"...ht, [ indistinct conversations ] lemonis: ...we'll see a business get built... xavier: oh, geez. lemonis: ...from the ground up. i think it's going to take $2 million initially. and you may even recognize these two. charlotte and skyler were partners in a business i attempted to invest in in season 5 -- the casery, a cellphone accessory company. charlotte: oh. lemonis: charlotte headed up the design team and has a great eye... these designs are awesome. ...while skyler oversaw operations and a number of other things. skyler: i also take on the cfo responsibilities. lemonis: that's an interesting crossover. but ultimately, they both reported to matt, the ceo. matt: try not to be an [bleep] lemonis: i'm not an [bleep] to you. charlotte: from day one. lemonis: and matt, well, he was just impossible. skyler: matt is really overconfident,
thinking that he knows what's right. lemonis: not only had he made some seriously misguided business decisions... is this only for girls? matt: yes. lemonis: ...but he was always undercutting charlotte and skyler's authority. matt: well, now these guys have it that they can do whatever the [bleep] they want. if i'm acting ceo, we go with my decision until you vote me out. lemonis: he would ignore their ideas. charlotte: i just think we need a leader that puts the company first and not himself. lemonis: he was nasty. matt: i literally did with charlotte. we stepped the [bleep] out. lemonis: you don't have to get that crazy. and while i tried my best to help the business, even lining up a huge opportunity with t-mobile... and we're going to bring you designs that are exclusive to you that we will not put in the market. matt: no. lemonis: ...he just blew it all, and finally, i reach my boiling point. you're a smug prick. you have disrespect towards her and disrespect towards him, and they've done nothing but eat from a bag of [bleep] since i met you. and i walked away. but just a few days later, i got a phone call from charlotte.
oh, really? well, this is what happened next. my name is marcus lemonis, and i risk my own money to save struggling businesses. we're not going to wake up every morning wondering if we have a job. we're going to wake up every morning wondering how many jobs we have to do. it's not always pretty. everything is going to change, everything. but i do it to save jobs, and i do it to make money. this... let's go to work. ...is "the profit." ♪ ♪ charlotte: you ready? skyler: i'm excited. charlotte: yeah, me, too. lemonis: it's only been a few days since i walked out on the casery, but i have these two people in charlotte and skyler that have a ton of talent and a lot of knowledge about the accessory business. charlotte: hi. how's it going? skyler: hey, marcus. lemonis: how are you? and i have this relationship with t-mobile where i had a huge meeting set up, and for me to miss out on that opportunity doesn't make any sense,
so if i want to really make some money, i have to figure out how to put all of this together in a very short period of time. how you guys feeling? skyler: still nervous. just before we came over here, actually, we had that conversation with matt and, like, told him our decision, that we're not going to be continuing to work with him. lemonis: oh, you did? how did that go? charlotte: yeah. it went pretty well, actually. he didn't seem that surprised, so i don't know if maybe he kind of saw it coming. lemonis: or he's playing poker. charlotte: exactly. lemonis: well, let's go sit down, and we can talk about it. what are sunshine and xavier thinking? charlotte: they want to come with us. lemonis: they do? charlotte: yeah, they want to leave the casery. lemonis: so let's talk about the deal. skyler: well, you know, we'd really like to get a couple products developed quickly and, you know, really start generating some revenues. lemonis: you essentially just need somebody to finance your inventory. skyler: exactly. charlotte: yeah. lemonis: i think it's going to take $2 million, initially. from my perspective, i'm putting money in, and you guys are putting money in. your form of money is, like, your brains and your work, and the $2 million, it can't be equity. skyler: why is that?
lemonis: because if i put $2 million in, and you own 51%, it'll be like i gave you a gift of $1,000,001. you'll get a tax bill from the irs, and so we have to figure out how to structure it in a way where it's not seen as a gift. it's seen as a preferred investment, and so i get my $2 million back before any profits are taken. and if the company makes a ton of money, you guys can pay it back in time. in order for a business to start from the ground up, there's a couple of things that you have to factor in -- start-up costs, including payroll, and once the orders start flowing in, you have to buy the inventory. you have to deliver it to the company, and then, ultimately, you have to wait 30, 60, or 90 days for payment. as the orders get bigger, there's more money that's required to finance those receivables, so $2 million sounds like a pretty reasonable amount with getting an account like t-mobile. i'll have 49%. you'll have 51%. i don't have to have any operational control, any payroll control, no creative control, but i have to have financial control. charlotte: mm-hmm.
lemonis: does that make sense to you guys? skyler: that works for us. charlotte: i think so, yeah. you are 49. we're 51, and we, you know, we will split that evenly. lemonis: who's going to be the ceo of the business? skyler: that's what we hadn't really decided, but -- charlotte: well, we talked about it. lemonis: i'll do it for you. i think it should be charlotte. skyler: but, like, i do have a lot of background in product development, and, you know, a lot of my experience and skills are more so than just being in operations. lemonis: i think it should be charlotte, not because you're not qualified but because i feel like charlotte really is more even-keeled than you are, and every leader needs a sidekick, and you're that guy. skyler has a deep knowledge of the manufacturing side, the production side, where charlotte really understands the design component, and candidly, i think she's ultimately better with big clients like t-mobile. she's friendlier. she's warmer, so they complement each other. so, the meeting with t-mobile is scheduled for, like,
a little more than a week from now. skyler: yes. charlotte: yep. lemonis: and i did not cancel it because i didn't want to send them into a spin. charlotte: right. lemonis: the time crunch is real. we're talking about boards, a brand, new designs that are totally different than the casery. charlotte: right. lemonis: more gender-neutral so that you're addressing the entire phone market. so you guys need to set up a new llc. you should get a quick articles of incorporation set up. what about the name of the business? skyler: that's going to be really hard for us. lemonis: well, what are you telling t-mobile? "what's your name?" "we don't know yet"? we need to lay out, like, packaging. probably need to decide by tomorrow. so, charlotte, what i'm looking for you to do is be that leader. charlotte: mm-hmm. okay. lemonis: it's your business. charlotte: okay. lemonis: matt never gave charlotte the chance to be a leader, and it's going to be interesting to see how she handles these new responsibilities, especially under a tight timeline. charlotte: there'll be some serious brainstorming, but i think we can do it. lemonis: holy [bleep] there's so much to do. charlotte: yeah. lemonis: after t-mobile, we have to actually deliver it. skyler: you have to have a supplier to fulfill, right?
charlotte: yeah. right, right. lemonis: in any account, there are really two parts to actually doing business -- landing the pitch and getting the yes, and then the hard part, which is actually fulfilling the order. skyler: we still want to go to china, as well, this month. lemonis: before the meeting? skyler: after the meeting. charlotte: it would be after the meeting. we want to be able to go to this show where we can source new products. skyler: is there anything else that you want for your investment? lemonis: yeah, i just want you to treat each other with respect. skyler: okay. lemonis: that is the single biggest reason i couldn't do business with matt. he just wasn't respectful to his people. so, come prepared to work. charlotte: sounds good. lemonis: we're going to go long and late. skyler: that's right. charlotte: sounds good. ♪ bye-bye, pink door. skyler: bye, pink door. charlotte: bye, casery. lemonis: i'm excited to get the ball rolling on this new project. the team is moving out of their old casery office... charlotte: to get ready for t-mobile and stuff, we need a lot of -- we're going to need you guys a lot. lemonis: ...and into my office in downtown l.a. charlotte: thanks for having us. sunshine: we're here. lemonis: what? sunshine: oh, my god. lemonis: and with 10 days to actually get the pitch ready,
there is no time to waste. okay. come on. i'm going to show you your space. xavier: all right charlotte: cool. oh, my gosh. xavier: that's pretty sweet. charlotte: this is so cool. lemonis: maybe, charlotte, we can start with your t-mobile plan, and it's, like, literally 10 days from now. charlotte: 10 days. xavier: i ain't scared. lemonis: what? i am. [ laughter ] you're not scared, but i am. so, charlotte, we'll give you the board. we'll pull some chairs up, and we'll start making a list of things we need to do. charlotte: yeah. okay. sounds good. lemonis: ooh! charlotte: first thing we need is a name. we need brand identity. xavier: yeah. lemonis: what about people's roles? how are we going to get to the finish line if nobody knows what anybody's doing? charlotte: um... okay. so... i mean, i really want this to be all of us. skyler: right. charlotte: but the people who are going to be truly, truly responsible -- i mean, i'll be completely responsible for it, but i'm going to really need you, xavier, and you,
sunshine, obviously, and then, of course, you, as well. lemonis: what about -- whoa, whoa, whoa. whoa, whoa. everybody's got to have a very specific role between now and 9 days from now. charlotte: yeah, but, i mean, we want it to be a collaborative thing. like, we want to know what you can be responsible for, what you want to be responsible for, and kind of come to, like, a happy medium on that. so this will be "all." ♪ lemonis: well, no, but what are the job responsibilities? this idea of everybody sort of having a little bit of everything isn't going to work. i think charlotte struggles because she doesn't want to offend anybody. she doesn't want to make a mistake. she wants everybody to feel included. the sign of a good leader is being able to do that and delegate. who's taking the presentation? charlotte: who's, like, actually doing it? lemonis: yeah. charlotte: i mean, i will. lemonis: okay. you're the face of the business, and you're the voice of the business. charlotte: okay. ♪ lemonis: after the roles were assigned, the team spent the next few days setting up their office...
charlotte: anything that's in cardboard boxes, we need to take out. lemonis: ...developing new designs, and coming up with a new name and a branding strategy for the company. you guys had some stuff to show me? charlotte: oh, we just want to show you everything that we've been working on the last couple days. lemonis: okay. charlotte: all right. so, here's our new logo for everkin, because our line is really for everyone, and the swoop really kind of, like -- it's like a hug. it just, like, brings everyone in. i mean, before, it was really for women. skyler: it's really accessible for everyone. lemonis: i think you guys did a great job with it. i love the fact that they came up with a name that really represents all of their collective thoughts. i also like the fact that charlotte really led that process for the first time. charlotte: and it's a catchy name, and, like, we can really play with it, like, i don't know. lemonis: charlotte, when you say "i don't know," they're going to smell any lack of confidence. charlotte: okay. got it. lemonis: and i want you to deliver it with, like, dead-stop confidence. okay? charlotte: all right. so, now we have some --
we kind of just put together boards. so, this is, like, our bread-and-butter everkin line, so it'll be marbles and textures. ♪ lemonis: what do you think i'm thinking? charlotte: it's too similar? lemonis: i think the bottom two, for me, are too close to the old company. charlotte: but, like, there are a lot of companies out there doing marble. lemonis: for me, they're a no. charlotte: no, i don't agree with you. i think this is really awesome. yeah. ♪ lemonis: is this your guys' first presentation like this? xavier: yes. lemonis: it kind of shows. charlotte: marcus. everyone's already freaking out, and, like, we know what's [bleep] lemonis: but you're kind of putting it on me as if i'm bringing the energy down. charlotte: [ chuckling ] you are. lemonis: because you're not ready.
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charlotte: right. lemonis: i don't want anybody ever questioning your integrity. my job is to protect you guys. charlotte: i -- yeah. no, i get that. lemonis: go get some sleep. skyler: whoo! charlotte: sunshine. lemonis: thanks, guys. xavier: awesome. thank you. ♪ ♪ lemonis: hey, guys. sunshine: hello. charlotte: hi. lemonis: have you gotten any sleep? sunshine: no. xavier: no, no. lemonis: you look like death, but i'm glad that you're working hard. do you guys want to do a presentation? charlotte: okay. let's get it set up. lemonis: all right. let's go through it. charlotte: okay. so, thank you guys for having us today. we're really excited to be here. so, the last time we saw you, jon... lemonis: "my name is..."? charlotte: jon and john? lemonis: no. no. charlotte: oh, that's right. i didn't do that. lemonis: your name. charlotte: i'm charlotte. i'm the ceo, and i'm excited to tell you about the brand that we've been developing.
we, um... [bleep] ♪ lemonis: okay. i just want to tell you guys something. any of you at any point throughout the presentation, pipe in. anytime you seem them fade, keep their attention. i'm not going to give charlotte a pass here. i know she's tired, but if you want to be the ceo, that's what comes with the territory. charlotte: so, we've been working to create this brand. it's a case for everyone, and the name is everkin. lemonis: it looks like the customer skews female. i wouldn't necessarily put them on my phone particularly, but i like the fact that they all have a different feel to them. and it feels like there's some gender-neutral designs here. i'm not totally in love with the designs. what worries me are some of the same issues that worried me at casery. they skewed very female, but i feel like telling them now will take them off their game. i just hope that t-mobile doesn't feel the same way i do. lemonis: okay. i think we should stop.
okay. all right. get some rest. charlotte: okay. thank you. lemonis: good job, guys. skyler: how big are the easels? can the easel hold that many boards? we're going to have to open the easels up here and test it out first. charlotte: i don't want to open all of them. they're, like, in tight, little boxes in my taped-up thing. ♪ the easels are the easels at this point. [ chuckles ] ♪ skyler: all right. xavier: we're too tired. ♪ charlotte: we just got to hustle. lemonis: today is a bigger day than i think they even realize. and while i hope that they're rested, what i hope for more than anything is that they're prepared. xavier: oh, geez. they didn't even label the pieces. charlotte: they split. look. sunshine: oh, no. [ laughs ] xavier: yeah, maybe it's like this, sunshine. lemonis: hi. charlotte: hi. skyler: hey, marcus. lemonis: how are you?
you guys know that we're starting in like 5 minutes. xavier: we are aware of that information. charlotte: we didn't get up into this room until a few a minutes ago, so we're trying to just hustle it together. lemonis: okay. but you are just setting up the easels now? you didn't pre-set them up? charlotte: they were supposed to be really easy to set up, and they're not as easy as -- lemonis: okay. i think, actually, you guys, we're going to have to abandon the easels. skyler: i wouldn't be opposed to that. lemonis: well, we just don't have a choice. i'll just -- i'll be your easel. skyler: kill the easels. lemonis: but we're out of time. xavier: kill it. lemonis: so, put them away. let's get this stuff put away. did you guys bring this up? charlotte: yes. we need to put it away. lemonis: [bleep] is this your guys' first presentation like this? xavier: yes. lemonis: okay. because it kind of shows. charlotte: this is for you, marcus, if you want it. lemonis: okay. i definitely want it. and what time is it right now? skyler: 12:02. lemonis: and what time was the meeting supposed to start? skyler: 12:00. lemonis: so we need to, in the future, be ready, even if you have to get stuff ready downstairs. charlotte: marcus, everyone is really down and freaking out,
and i need your help to pump them up. can you help me do that? lemonis: you need to do it. charlotte: i know, but i need you to come in here and also really -- everyone's already freaking out, and, like, we know what's [bleep] and we just need to -- lemonis: okay. well, you guys need to -- charlotte: thank you. all right. so let's get these boards in the right -- lemonis: charlotte. don't put it on me. i don't really care that charlotte's frustrated with me. she's the leader. she asked for this job, so don't get frustrated with me because you don't have your act together. charlotte: i just -- lemonis: you're kind of putting it on me as if i'm bringing the energy down. charlotte: [ chuckling ] you are. lemonis: because you're not ready. charlotte: no, we're not, and we know. lemonis: no, i know, but what i'm not going to do is tell you how wonderful you are when you guys aren't ready. ♪ if your business is in trouble, and you need my help, log on to theprofitcasting.com.
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when you guys aren't ready. ♪ if you're wonderful, i'll tell you. if you're not, i'll tell you, and that's the best way for us to roll. this relationship has to be built on truth. while i'm frustrated that they're not prepared, i do like the fact that charlotte is standing up for herself, because the sign of a good leader, in my mind, is one that is willing to not just be a yes-person. charlotte: hi. xavier: yo. sunshine: hi. charlotte: how are you? woman: good. thanks. skyler: welcome, welcome. man: so... charlotte: well, thank you guys. first of all, thank you so much for having us. i'm the ceo, charlotte. skyler: i'm the coo, skyler. sunshine: designer, sunshine. xavier: also a designer. my name is xavier. charlotte: so, i just want to let you know what's been going on the last couple of weeks. we kind of realized the company was not being run the way that we wanted it to be run, 'cause we were really focused on one single customer. and we wanted to break out on our own, and we've been doing this for 3 years. skyler: and even though that we're a new company, like, we're totally ready to go with any of the requirements that you guys might have, whether it's logistically or anything like that,
so, you know, we're ready to fulfill. xavier: so, first off, thanks for coming to see us. we really appreciate it. and when it comes to everkin, we really wanted to make a case for everybody, a product for everybody. we wanted everyone to feel like kin. jon: i think it's great. sarah: i especially like that it has a story and that there's meaning to it. sunshine: cool. so, what we really want to do at everkin is take what's hot and new and make it more special and make it ours. but we're not just slapping marble textures onto cases. we're doing something more. lemonis: what do you think of the designs? how does this feel to you, gender-wise? sarah: very skewed female. jon: yeah, i agree. lemonis: heavily skewed? jon: not heavily. not for me. sarah: really? jon: yeah. i would say -- sarah: you'd wear -- okay. come on. you'd put that on your case? jon: i'd, um... sarah: honestly. lemonis: is there anything on this board that you would put on your phone? jon: i would put that one, the lower right. sarah: i actually would say, my l.a. friends,
if you were to think about our l.a. team, many of the men might go for that. jackson: i totally agree. sarah: the gold is so on-trend. and the mixing the marble with the gold, i haven't seen anything like that. it looks fantastic, and i think that these have a sophistication to them. xavier: aside from that, we really wanted to, you know, make sure we hit that t-mobile magenta in the designs that we made, because it would be really cool for the customer to get something that is branded t-mobile but doesn't, like, feel like it to them so that they're walking around showing off this cool case, while at the same time, your brand is being extended. sarah: this was smart of you, because there are the people who are fans, and that was nice. jon: wow. that's impressive. jon: hey. how are you? charlotte: hi. lemonis: how are you? charlotte: welcome. hi. i'm charlotte. john: hi, charlotte. i'm ceo. nice to meet you. john: oh, cool. yeah. young, smart people. lemonis: look, the fact that the ceo of t-mobile comes into the meeting is a very big deal.
charlotte: this is probably a good time for us to take off our hoodies and fit in a little bit better. sarah: oh, nice. xavier: we're all kind of part of the team. lemonis: and i like the fact that charlotte was smart enough to know how to be clever with the branding and whips out these t-mobile shirts. charlotte: so, this is how we look at our business and our designs. we really want to fill each and every one of these buckets so that anyone that walks into t-mobile, there's a case for them. men and women and then, the different age groups. john: thanks for acknowledging that there is a right-hand side to that chart for those of us. lemonis: just out of curiosity, what box are you in? john: i'm where she's standing. [ laughter ] but we have high disposable income, and we buy -- and we have children down there that we're buying. we could sell so many of these. i like it. lemonis: that's fine. thank you. john: i'm in. thank you. i look forward to working with you. i'll see you before you leave. lemonis: thank you, sir. the designs passed the test, barely, but i'm concerned that they still skew a little too female. the good news is, is that we still have a few months before they get in stores to tweak the designs
and make sure that we have a good balance between male and female. but i am happy to say that everkin has its first account. sarah: we have a launch coming up in august that we'd want to have you take a look at that and see if you could make those deadlines. jackson: great job. jon: we're excited for the next steps. charlotte: we are, too. sarah: thank you so much. lemonis: they got a order for 38,000 cases with 18 designs, and they're going to be able to be in all the stores nationwide. this is a huge accomplishment. here's the problem. we have the order, but we don't have the product to fulfill it. lemonis: lot of work to do charlotte: thank you. lemonis: we'll see you soon. charlotte: thanks, marcus. lemonis: in order to get this order fulfilled, our first step is to get these cases manufactured by professionals. so the team is heading to hong kong... charlotte: yay, hong kong! lemonis: ...to one of the largest trade shows in the world. i'm expecting them to find the latest and greatest in cellphone cases, accessories, and the newest technology, but they're also there to work on their teamwork, something that definitely didn't exist at the casery.
now that the team is back to los angeles, xavier and sunshine are working on all-new designs, so they can be printed by the manufacturer in hong kong, and skyler's working with the 3pl, a third-party logistics company that will receive the cases after they get air-shipped from hong kong. once received, they'll get inventoried and packaged and then shipped out to the t-mobile stores. skyler: we just got word that the iphone xr, one of the sizes is getting pushed back, the release date. karlo: ooh. skyler: so we're going to have to re-label basically all 7,000 of those units before we deliver. karlo: that'll be cutting a little close. lemonis: i've also brought in clickup. they'll provide software to charlotte so she can help manage her team's tasks and deadlines. zeb: really, we just try to bring everything to do with productivity into one central location. so, like, if you're a manager, your homepage is going to be what we call "box view," so you can see what each person is working on. man: it's a tree diagram essentially of everything that needs to be done. charlotte: yeah, this is what i've been looking for. lemonis: this has been one of the most brutal months
that any company, let alone a start-up, could handle. there's pressure on money, delivery dates, a large customer, and with all this pressure, i'm hoping that charlotte and skyler's relationship can withstand this tension. charlotte: i want to talk to you about something, 'cause i feel like a lot of times, you kind of keep me out of the loop. like, if you're coming out here, like, i'd like to come with you. you know, like, i want to have a relationship with these people, too. there are a lot of gaps in my mind of how things are working, 'cause the information is kind of being withheld. skyler: a lot of times, i feel like i don't know what you're really working on, either, so obviously, like, you know, doing a lot of accounting right now and other things like that, and i'm not sure always if it's the best use of time for us both to be working on that. charlotte: i need to be in the loop. i need to know what's going on. skyler: yeah, i mean, sure. lemonis: hey, guys. skyler: hey, marcus. charlotte: hey, marcus. charlotte: hey. good to see you. lemonis: and so, this is all that's in? skyler: yep. lemonis: what's left to come? skyler: so, there's 12 more designs that are coming. lemonis: uh-huh. the fact that we're a week away
from the t-mobile launch has me feeling pretty anxious, so i wanted to head to the 3pl just for a little insurance to make sure that every last detail is handled. skyler: spent a lot of time looking at different 3pl facilities. we found that this was actually a really good deal for us in addition to the convenience. lemonis: so, what are the economics? skyler: so it would be $2.70 plus 10 cents per -- lemonis: $2.70 per item? skyler: no, for the first item, to get the box. lemonis: so, i need to think about the pricing as the action to come over to do it and then any incremental action is 10 cents. skyler: yes. lemonis: $2.70 feels high to me. you know what it is? charlotte: well, is it the -- lemonis: it's $2.35? so, what's the pricing, now? edward: so i believe it's $2.35. lemonis: okay. so why did you think it was $2.70? skyler: i mean, i just don't have it actually written out -- lemonis: i know, but you got to know that [bleep] like, that's a big number to know. okay. so, i want to understand this, so get an empty box and just walk me through the economics. i just want to visually see that. edward: so, $2.35. lemonis: so, they're going to pick an item. edward: so, we're going
to pick these items. lemonis: $2.35, boom. edward: and then each additional item is 25 cents. skyler: i thought it was only 10 cents. naim: the way we billed before, it's 25 cents a unit. lemonis: okay. you know what frustrates me about skyler? he always talked a big game, and he always had a lot of confidence, and right now, it's game time, and he's looking at me like he's a deer in the headlights. if this order and this relationship doesn't get executed properly, then it's game over for this business. lemonis: skyler, how much is this -- how much is their bill on 21 items? skyler: so, let's see, 21 -- lemonis: no, no, no. let him do it, 'cause this is what i'm frustrated about. skyler: so we'll have $2.35, and that includes two units, so we've got 19 remaining. charlotte: so then 19 times -- skyler: so 19 times 25 plus $2.35 is $7.1. lemonis: great, and how many items are in here? skyler: 21. lemonis: great, and so what's the average cost per item? skyler: 33 cents. lemonis: great, so it's 33 cents. so, what --
like, you're in charge of the supply chain and understanding where it comes and when it comes and how it turns, and i neyou to know it, too. what i don't like is the fact that skyler doesn't know the number. and while i'm putting all of it on skyler, by the way, charlotte's not exempt. you want to be a leader, you have to know these details. unfortunately, you have to have your eye on everything. charlotte: yeah. lemonis: and then we need to figure out, what business are you getting outside of t-mobile? 'cause that's giving me -- charlotte: yes. yeah. lemonis: giving me anxiety for sure. ♪ xavier: i've got all the jewel stones. charlotte: i think you have to make that part first. and this is not trash. charlotte: so, that, you fold into shape. skyler: i'd really like to try and get it figured out sooner so that we're not rushed. lemonis: i'm headed to the t-mobile store in new york city, where charlotte and the team are getting ready to launch all of their new products. and i'm anxious to see the new display and how the products are working and customers' reactions.
charlotte: insert body into base. this is a learning experience. lemonis: is this, like, the launch case? charlotte: this is the shipper that all the stores got. i think we have to fold them, right? lemonis: the same thing that happened at the t-mobile presentation is happening right now again. this is a multi-billion-dollar company that awarded you a huge contract, and you're sitting in the middle of their new york city store putting it together like this is an arts-and-crafts exercise. xavier: isn't there a piece that goes -- charlotte: i mean, everything happened so fast that we didn't even have a sample of it in our office. lemonis: so that's a problem. charlotte does have to actually figure it out. ♪ charlotte: hey, marcus. skyler and i had a call with t-mobile. skus that were selling are not selling as well anymore, so they want us to pay $300,000.
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charlotte, you guys have to actually figure it out. skyler: and the whole display cost us $23. lemonis: come on. it looks like it's way better than that. charlotte: okay. lemonis: i still think the designs are not good. sorry. so, pineapples are great, but we need to get a little more masculine. have you gotten any feedback from any customers? charlotte: no. lemonis: maybe we grab some and get some feedback. man: colorful. charlotte: lady-ish? yeah. so, would you wear this case? man: yeah, i would. it's just very lady-ish. lady-ish, lady-ish, lady-ish. charlotte: mm-hmm. man: like, i'm a construction guy, so... lemonis: i know that t-mobile is happy that they were able to meet all the deadlines and be in-store, but i still feel like they need to skew more masculine, and i'm done asking. but i think if you can be proactive in saying, "we'd like a selling report, and we want to swap out the poorest performing one. send them back to us. we're going to send you a replacement that's in this family." don't wait for them to tell you. ♪
[ phone line ringing ] ♪ charlotte: hey, marcus. lemonis: hi. how are you? charlotte: so, basically, skyler and i had a call with t-mobile. skus that were selling decently are not selling as well anymore, so what they want to do is that we help them with some markdown support, and basically, they want us to, you know, pay the difference. lemonis: when you sell product into a retailer, and the product doesn't sell, they're going to come back to you and ask you for markdown money, which refers to funds that you're going to give to them to allow them to take the retail price down. and they're essentially saying to you, "we're dropping the price, and you're paying the difference." charlotte: so they're taking it from $40... lemonis: $40, okay. charlotte: ...to $30, and they want us to pay that $10 cost, and what that would be at this point is about $300,000. lemonis: the way a retailer would think about it is
when they give you a specific area to sell something, they are assigning an expected revenue amount from that area. so in this particular case, they were retailing the product for $40. they want to mark it down to $30, but they want the vendor, me, to pay the difference. there's 30,000 cases in question. that's a $300,000 check. all of this could have been avoided if charlotte would have followed up with them to switch out the slow-movers, the non-sellers right away. so why would anybody in their right mind do that? charlotte: skyler and i really wanted to do what we can to keep the relationship alive. lemonis: the fact that you guys would even think that's a good option makes me not want to do business. it doesn't make any sense. we'll just take the product back, and we'll go a different route. charlotte: sounds good. i guess there's no way that we can afford to do this. lemonis: i don't want to write a check for $300,000, and by the way, what's the company going to do now? this was their one and only account. all right. thank you. bye-bye. ♪
what's happening? charlotte: hey. how's it going? lemonis: with the t-mobile deal falling apart, i wanted to stop by the office to find out if charlotte knows what the next step is, 'cause she wanted to be the ceo, and she wanted to have her own business, so i'm looking forward to hearing what it's going to be. charlotte: yeah, the t-mobile thing was -- you know, it was hard to hear. it was a bummer. i think we really learned that things need to be a lot more masculine than we realized. lemonis: so things have to be more masculine? charlotte: yeah. lemonis: so, i'm going to take you guys back in history to a time where i told you guys that you needed to have more male stuff. charlotte: yep. lemonis: why didn't you follow that advice? charlotte: honestly, i thought we did have more male stuff. not fully male, but, like, we went more, like, gender-neutral than we ever did. skyler: what we learned this time is that what we need to be doing for male stuff isn't anything prints. it should be totally functional and materials-based. for a client like t-mobile, that's what's going to work and get the sell-through that they're looking for. a lot of stuff has been going not the way that we wanted to.
definitely some frustrations the past month. lemonis: okay. charlotte: we had a couple weeks where we just were not getting along. skyler: i'm still frustrated that we're not really getting anything figured out with sales. like, that's the constant source of frustration for me. charlotte: that's frustration with me, right? 'cause i'm doing sales. it's okay, like -- skyler: i'm frustrated about the sales, but it is your responsibility. lemonis: i'm frustrated with you guys that you're not selling. skyler: right. so, some things get -- i think a lot of times, charlotte doesn't think as big-picture as she needs to, necessarily. i feel like no one is running the business, a lot of times. ♪ lemonis: do you think you should be running the business? ♪ skyler: um... ♪ lemonis: okay. so, this probably is the biggest meeting you guys have had... charlotte: yeah. lemonis: ...a really big deal.
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[dinosdon't even! [dinosaur noises] i'm serious! [dinosaur noises] yes! frito-lay variety packs. packed with possibilities. skyler: as big-pictureof times, as she needs to necessarily. i feel like no one is running the business, a lot of times. lemonis: do you think you should be running the business? skyler: i don't think it's something that is really best for either one of us to do alone because we have different areas of expertise. charlotte: i can totally see where that's coming from. i don't feel like i'm running the business. lemonis: you don't? charlotte: no. i feel like i have no idea what i'm doing sometimes, and it's really scary, and, like,
that's sometimes why i get your -- a lot of the time, why i get your input and your opinion. skyler: just need some more structure. i mean, we are making some progress. it's definitely taking longer than, i think, we'd like. lemonis: team effort. charlotte: yeah. lemonis: right? you own a big chunk of the business. you own a big chunk of the business, and so it's not like you're some employee. i don't know what kind of grade i would give charlotte right now as the ceo, but i'm noticing that she's not listening on the design side, didn't manage the relationship with t-mobile like i wanted to, and it seems like she's having a difficult time even communicating with her people. and i don't know what skyler's issue is right now, but what i'm sensing is he's got a little bit of an attitude. and i don't know if it's from a, "maybe i should have been the ceo" or not. here's a news flash. you're not, and you need to be supportive. i need to see that from him right now. what's the coolest thing happening right now? charlotte: i think our product development is the coolest thing happening right now. i mean, we got a ton of new ideas. we've been doing a lot of product development. we want to have kind of a utilitarian line.
this is, like, a super slim wallet case. but also, we have these wireless chargers, which are going to be a really awesome way to go. lemonis: okay. charlotte: we've also got a meeting with marvel set up, which i think is going to be awesome. lemonis: seriously? charlotte: yeah. skyler: that's kind of one of the ways we're approaching the more masculine stuff. lemonis: that's super cool. lemonis: the fact that you're stepping up and getting these meetings and finding new alternatives and not getting discouraged is progress. i like the fact that charlotte is working on skewing more male with things like marvel, but what i don't want her to do is put all of her eggs in one basket. i've given charlotte a contact at major league baseball, and here's why. t-mobile and major league baseball have a very strong relationship, and i know that t-mobile is looking for some of their cases to skew more male. charlotte needs to make the phone call. she needs to set up the meeting, and she needs to land the account. if she can do it, then maybe she can save t-mobile. and if she can't, then the business is probably going to close.
♪ this company essentially started a few months ago, and all of a sudden, we're now in new york city, heading to the commissioner's office of major league baseball. and i'm fairly confident that if we can secure this license, t-mobile will allow these cases and accessories to be sold in all of their stores. but making the meeting and securing the license, well, that's a whole different ball game. are you getting more comfortable leading? charlotte: yeah. i think just getting that, like, out in the open, clearing the air was really good for me and for our communication, and, yeah, i've been just, like, pulling the trigger on decisions a little bit more than i was before. skyler: i'm getting good communication with charlotte, and we're kind of figuring out what we need to do. lemonis: this probably is the biggest meeting you guys have had, because normally, you would go through a licensing agency. charlotte: yeah. lemonis: but to be able to roll right into major league baseball's offices
and do a deal directly with them is a big deal. charlotte: it's crazy. yeah. lemonis: by the way, you look pretty snazzy today. you dressed appropriately for the meeting. skyler: okay. good. lemonis: i can't get over how different you look. let's go inside. ♪ this is awesome, all the way down to the last detail. they're going to want to hear why it's a good fit for them. like, why should they do this? charlotte: yeah. lemonis: the major league baseball license is one of the most coveted things in all of licensing, and if they could somehow figure out a way to become one of a very few that can have access to this, it'll be a home run. lemonis: how are you? marcus. noah: good. how are you? noah. nice to see you. lemonis: nice to see you. noah: hi. charlotte: hi. i'm charlotte. noah: charlotte. noah garden, nice to see you. skyler: skyler. noah: thanks for coming in. charlotte: yeah, so, we were just putting up some samples, so you can kind of see the quality, but -- lemonis: thanks for meeting with us, by the way... noah: oh, of course. lemonis: ...on short notice. we're in the big leagues. charlotte: i know. the major leagues, literally. yeah. as far as product, we do phone cases. we have these wireless chargers,
which i think are going to be a really awesome way to go. they're kind of a different product that -- lemonis: wanted you to see the quality and the weight, and i wanted you to see the cases. noah: what's generally the price point? charlotte: they'll be $29. skyler: we think that's the right price point... charlotte: that's a better price point. skyler: ...because our focus is on, how can we provide that level of sell-through but also provide that level of quality that we want, because it's our brands on the line, both mlb, of course, and everkin, right? charlotte: we'll go through some stuff that we put together for you guys. i see them as kind of complementary designs. so, we can do stuff with team logos, but we can also make it really fun and interactive. i love, like, the, you know, making it feel dirty and really making it feel real. like, these complement this, so it's not like your phone is exactly the same as your charger. but they go together well, and you can get both. noah: just looking at it, i wonder if you can bring a little bit more of baseball in it.
like, if you use, like, stadium shots and stuff that's sort of iconic to each team that, you know, people identify with maybe might make some sense. charlotte: we also did this line. this is a little bit more subdued. it's embossed with, you know, your team. we can do simple, just the coloring, or we can even have, like, the stitching on there. noah: anybody can slap a logo on anything. charlotte: right. noah: i'd like some more authentic picture on it. lemonis: for exclusives, extras, and business advice, visit theprofit.cnbc.com. geico would like to take a moment to say thank you to our military service members at home and abroad
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charwe can do simple,sed wijust the coloring, or we can, you know, even have, like, the stitching on there. noah: anybody can slap a logo on anything. charlotte: right. noah: i'd like some more authentic picture on it. ♪ skyler: a lot of the way that we think is, how can we design and make unique products? and we don't want to just slap a logo on a case, right? anyone can do that, and that's not why we're here, so we want to figure out, what are the right ideas that are going to make something really unique? lemonis: and that's leather, right? charlotte: we can do it real leather or pu leather. yeah, this is kind of, like, for the guy that goes into an office every day -- kind of, like, exactly like your case, but it's embossed with your team, and they're still super protective. noah: listen. i like this. it's fashion-forward from my standpoint if you see what's going on in caps, which is always our barometer. you see the contrast on contrast, and it's very popular, so i definitely think the same way here is -- and listen. the license that you get from us affords you stuff that other people can't have. pictures of the stadium, it's all part of our intellectual property, and so we encourage
our partners to use that, 'cause that will separate you. lemonis: i could tell the meeting was going really well when noah started offering charlotte licensed images and had all sorts of ideas. but then charlotte wanted to take it one step further and swing for the fences. charlotte: we also wanted to give women the opportunity to show off their team. so this was kind of more of our women's collection, you know, just to make it fun and still girly, but, like... noah: i like it. charlotte: ...showing off your team, you know? i mean, we live in l.a., and every single girl i know has a dodgers hat. noah: yep. looking at the people that are coming through the turnstile for us, it's right around 45% male to female right now. charlotte: really? good. lemonis: that's awesome. noah: so definitely think taking a little different approach to it like you've done here will appeal to a broader audience. charlotte: yeah. noah: i think it makes a lot of sense for us, and there's definitely room here to be very successful. lemonis: well, thanks so much. we really appreciate it. noah: thank you. thanks for coming in. lemonis: thank you very much. we're excited to get started. charlotte: so nice to meet you. thank you. noah: you need anything, just call me directly. charlotte: sounds good. skyler: we'll talk soon, then.
noah: looking forward to it. lemonis: i thought it was, like, a totally different company, two totally different people. the level of professionalism is just -- it feels different. high five. charlotte: thanks, marcus. lemonis: great job. very proud of you. charlotte: thank you. lemonis: super proud. to start a company and, in a matter of months, get a license from major league baseball, this was like winning the world series for small business. okay. well, you guys started a brand-new business from zero -- no customers, no designs, no cash, no ideas, and then you just walked out of a meeting at the commissioner's office for major league baseball. in all the businesses i've invested in, it's really the first time that we started from scratch, like, on a dry-erase board. charlotte: i love this city. lemonis: in the time since the mlb pitch, charlotte's continued to develop the company, preparing the team for a pitch to marvel, and she's in negotiations with a number of companies like striker entertainment. charlotte: we mocked up some cases and chargers with a couple of your properties.
man: nice work, by the way. man #2: fantastic. man: sounds great. lemonis: and to see what they've gone through and how they've learned and how they've stubbed their toe and picked themselves back up, their personal growth is really what makes small business so fascinating. the sky's the limit. ♪ i'm gonna just tell you, that cornbread is legit. at a packaged-food business, known for its flavorful mixes... erica: we have flavors like berry cobbler, bourbon salted pecan. lemonis: ...the owner has bitten off more than she can chew. andre: if you're not capable of running the business and making it successful -- erica: who says i'm not capable of running the business? lemonis: she spent way too much money. andre: she's been running the business for five years, and the profitability is close to zero. lemonis: now, colossal debts have clogged her cash flow. how much debt do you have? erica: it's probably about half a million. andre: shoot. half a million dollars. lemonis: ...bringing her business and her family to the brink. erica: why should i share information with him